Ahead of a Senedd debate taking place today, 4th February 2025, on the Welsh Government’s Draft Budget 2025-26, the Federation of Small Businesses in Wales have emphasised the importance of delivering on commitments made in the Draft Budget to extending business rates relief at 40% for retail, leisure and hospitality businesses and capping the increase in the multiplier used to calculate business rates at 1%.
Additionally, FSB is urging the Welsh Government to use the run up to the next Budget (2026-27) to set out how they will utilise new powers to vary the multiplier used to calculate business rates to support small businesses, drive growth and encourage entrepreneurship.
Ben Cottam, Head of Wales at the Federation of Small Businesses, said:
“The Welsh Government’s Draft Budget commits to a much-welcomed extension of the business rates relief for retail, leisure and hospitality businesses and a 1% cap on the multiplier used to calculate rates for all businesses.
“Delivery of this key lifeline will be crucial for many businesses in a context of razor-thin margins and soaring employment costs. It demonstrates an understanding of how challenging the economic climate remains for so many small businesses.
“The Welsh Government can also help businesses reposition themselves for the next stages of economic recovery and gear the economy towards growth by reforming business rates to drive prosperity, delivering on their commitment to improve the planning process, and growing business support funding in areas which could drive up productivity.”
Christopher Frost, owner of the boutique guest house Manorhaus, said:
"Small tourism businesses are vital to the fabric of our rural communities, providing essential employment opportunities for residents and attracting visitors who spend money in our shops, cafes, and other local businesses.
“The extension of the 40% business rates relief is important for businesses like mine and a vital step towards ensuring the long-term sustainability of our fantastic tourism sector. The past few years have presented unprecedented challenges, and this relief provides crucial breathing room as we work to rebuild and recover.”
Betina Skovbro, founder and director of The Danish Bakery Ltd, said:
“Independent and small shops are what inject vibrancy into our high streets. Cosy coffee shops and bakeries like ours play a vital role, fostering a sense of community by providing a place for people to connect, work, study, and socialise.
“However, the current economic climate presents significant challenges for small businesses like mine. A sustained period of rising costs, particularly in ingredients and energy, means that we are already operating on tight margins. Now we are facing the impending rise in National Insurance Contributions in April at the exact same rate as the larger companies, despite having far less headroom to absorb these additional costs, and as a bricks and mortar business we have no flexibility to reduce overhead costs by working from home.
“In this context, the Welsh Government’s commitment to maintaining the retail, hospitality and leisure rates relief provides a much-needed reprieve. This support gives us some space to focus on how we can survive this difficult period and navigate proposed changes to employment law.
“This isn't just about supporting individual businesses; it's about preserving the vitality of our high streets and our town centres."
Ends.
